tv Bloomberg Markets Asia Bloomberg September 9, 2018 9:00pm-12:00am EDT
rishaad: 9:00 a.m. in hong kong. in singapore, and :00 sunday evening. david: you are watching bloomberg markets china open. ♪ rishaad: china's trade surplus region a new high. trump saying he is ready to go. david: stocks treading water right now, early trade on monday as investors weigh the latest of
elements. rishaad: former pboc governor saying china could see a marked change in mood. david cohen jack ma prepares for the next stage in life. he may announce today that he is going back to school. rishaad: straits times index, taipei, kuala lumpur. a torrid time of it the last seven days with a big fall. there you have the equipment -- the equity position right now. not a lot of conviction out there. out. of data has come friday, we had reserves falling a little bit. we will talk more about the trade data with steve.
inflation numbers expected this half-hour. when you look at the trade data, a very simple story. the cause and effect trade tariffs, these trade tensions. the cause, you see the massive imbalance between the u.s. and china. at the same time, the effect, the slowing, initial numbers suggest slowing. have a look at dollars in nature dollar cnh right now. longestld match the losing streak going back to 2015. totald: president trump tariff threats unsettled markets in this side of the world. he said he was ready to slap tariffs on everything that china exports to the united states.
a quick check at the currencies. the dollar moving slightly to the upside. as i said it, it turned flat. these trade tensions continuing. we have moves on the bond market. let's get the kathleen hays. kathleen: former u.k. foreign cemetery boris johnson has launched what many see as a new bid for power, calling theresa may's brexit strategy a humiliation. writing on sunday, he rejected her plan to keep the u.k. close to eu trade rules next month. he said that the proposal would
leave u.k. accepting eu rules without any say on making them. the swedish prime minister says the general election has produced no clear winner and he will stay on his leader until parliament has a chance to decide. the social democrat coalition got slightly less support than the alliance opposition. north korea celebrated 70 years of existence with a town to down military parade that shows a willingness to revise stalled talks with the united states. the parade pass through pyongyang without any sign of intercontinental ballistic missiles. claimed credit for the change, calling it a positive statement from north korea. jack ma is expected to step away on monday from the company he helped launch to focus on his first love, philanthropy and education.
he told bloomberg last week he is looking at a change of life and several sources say he will make an announcement today, which happens to be his 54th birthday. he has been pulling back from alibaba frier sometime, having given up the ceo position in 2013. >> i think sunday, and very soon come i will go back to teach, back to education. this is something i have more confidence -- i think i can do much better than be the alibaba ceo. kathleen: global news 24 hours a day, on air and on tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i'm kathleen hays. this is bloomberg. ♪ david: thank you so much. tariffnt trump's total threat threaten to unsettle marketeer. he said he is ready to slap tariffs on everything that china ships to the u.s., adding fuel
to the fire with trade numbers over the weekend. the slowest pace of exports since march. it could get much worse. rishaad: loading -- loading there, surely. david: -- stephen: the numbers were the slowest since march. china recorded a record trade surplus with the united states. how could that possibly be? you are right. a lot of traders frontloaded a lot of the shipments before the expected pushing of the button, which did not come on the new tariffs on $200 billion of goods. but it is coming. donald trump has telegraphed he will elicit these new tariffs on billion,t only on $200 but on an additional potentially $260 billion. if you are keeping score at the $505t is more than
billion that china exported to the united states in 2017. david: how does that affect was on the weekend, the trade in balance certainly? stephen: the trade imbalance is something donald trump and the white hassle pointed. china is not. changing his ways because it is having a record trade surplus. but again, there was front loading, so there was an aberration. if you look at the china numbers , something that is encouraging a little bit for the economy, we have seen indicators that china's economy for the last four months has been showing signs of slowing, especially the export front. even though the official pmi rose last month, the export orders and new orders were lower. is that domestic demand seems to be holding up because imports were up 20%. that was better than expected. whether that is artificial, whether it is stimulus, like tax
rebates as well that the government is extending as a products, there are steps by the government to bolster demand and to bolster experts. -- exports. rishaad: they are talking at least. stephen: they are talking at a record -- at a working little group. but there is no face-to-face with top-level negotiators. rishaad: well that make a difference? stephen: with midterm elections, clearly, china is square in the crosshairs for trump and scoring points with his base. rishaad: thank you. i had, counting down to the inflation numbers out of china. we have producer prices and consumer prices.
you are watching bloomberg markets china rishaad: china's foreign currency openings causing significant capital outflows. the headt's bring in of wealth management. what is curious to me, the equity markets have been bad. but we have not seen the outflows story. why do you think that is? they have been diversifying globally.
in this kind of environment, you have to look at a globally. what happened lately with the look at it, it is limited, especially with the trade war. any disruption to their businesses? they put a plan on hold -- put a capex plan on hold. the limit on deficits is quite limited at this stage. if the trade war further escalates, that could have impact on the decision and on their expansion plans.
rishaad: [indiscernible] >> the trade war is a hot, hot topic. the trade situation is very close to [indiscernible] over the years, china dependence on exports has significantly come down. theou look particularly at china export to the u.s. has come down to 3.4%. it's more psychological. it has an impact on the
sentiment. clients int our general, they are getting more cautious. david: have they incrementally been taking money out? i know you have been advising them to do -- to diversify anyway. has there been a pickup of china?r, in demand in >> they are always looking for investment globally. i have not seen investment outflow. business has been well. david: i know the war for talent has been fierce. i have gotten calls myself, not that i would jump on them. general, asia, the great china region, such a
growth market for us. rishaad: is that where the money is coming into hong kong, places like that? >> yes. rishaad: how does that change the dynamic here or in singapore as well? with the wealth creation in china, hong kong is in a unique position. area initiative, hong kong targeted 68 million people. it is a good opportunity. for us leading in the wealth management industry in the are [indiscernible] daniel zhang will replace jack ma.
it will be a year to the day that we will see a change at the top for alibaba. that is what we have at the moment. this is the succession plan in place right now and a year to enact it. been ceo, daniel, when jack ma stepped down and just remained chairman. as you pointed out, 12 months from now. we will get more on the story lady are -- later on. i want to bring back amy. topic, you are cited in one of our stories last week pay jump that these junior bankers are getting to switch firms. is ubs prepared to pay that or is that the high-end? as i said earlier, they want
to get into the wealth management industry because of the growth driver of wealth creation. if they want to grow, talent is an important pillar. that is also the reason why we also have been working together on anong kong apprenticeship program to create more talent rather than competing with the small pool of talent in the region. rishaad: you have a lot of business owners in china. are they seeing any changes on the ground to the speed of growth, etc.? >> they have seen opportunity. but at the same time, with the -- they are a bit
nervous. at the same time, asian investors are agile. they're are looking for alternatives as well. rishaad: thank you for joining us. be stepping down a year today. the slightly weakening taking place of the yuan versus the dollar. library, savert yourself some time, save those charts for your future use your check it out. gtv . this is bloomberg. ♪
bloomberg markets china rishaad: -- china open. rishaad: jack ma will be stepping down. he told bloomberg he was cheated -- he was looking for a change of life. >> i think sunday, very soon, i will go back to teach, just go back to education. moreis something i have confidence, i think i can do much better than be the alibaba ceo. david: are tech reporters here with us. >> obviously, jack ma has prepared for this for a very long time, 10 years. it will be a gradual transition. 12 months from now, he will step chairman, handing over zhang. to daniel he will stay on board until 2020 and remain as a lifetime partner at the company. a lot of this has the key emphasis.
jack ma wants to turn alibaba from a company that is run by individuals to based on organizational structure. he has been building up his philanthropic efforts for years. will he go back to teaching? >> that is his key goal. teaching.ady he has a university that is well-known among chinese entrepreneurs. jack ma has a broader vision where he wants to use technology to not only transform education but also environment, water come all the things he has mentioned, as early as 2013 when he stepped down as ceo. david: what do we know about daniel zhang. >> he is a dark horse year. it was and him who succeeded jack ma as ceo in 2013.
this, he came out of -- as rising star the company who really was able to execute all the visions that jack ma had for the new developments in the company. for example, the new retail business that alibaba is now making inroads into and a light of the new initiatives, such as they grocery, smart grocery stores. that is all daniel zhang's doing. he is taking the company to the neck level. rishaad: thank you for that. . to raise llao looking
$963 million. it is known for customer service. david: toyota says it is planning to resume productions in hokkaido, which was halted by last week's earthquake. affected vehicle making across the country. output at all 16 plans were --ted temporarily as temporarily, but power has now been restored. hit by achina could be change in market sentiment in the event of an all-out trade war with the united states. central bank a letter telling bloomberg investors they could be getting nervous. >> how much does the trade war hurt the chinese economy? what are the tools? that can help sustain encounter
the trade war? -- isetary policy pollack monetary policy possible? >> i don't think so. a complicated calculation. they use a mathematical model to of thete the impacts trade war on the chinese economy. [indiscernible] $500 billion usd. it is significant. things, one is the confidence. so people may become nervous. nobody really knows.
suddenly, there is a trade war. they may change their mind in terms of stock market investment. they will look to the region on how to build their currency portfolio. it is much bigger than they impact. in addition to the trade war, when we see they use sanctions against some economies, especially emerging markets, argentina, turkey, russia, you can see depreciation. so it makes people nervous. hopefully, the sentiment could gradually stabilize.
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kongad: glories that hong -- glorious day in hong kong. counting down to the start of the trading day in the latest inflation data out of the fed. producer prices, 4% for august year on year. consumer prices likely to become 2.1%. that would be the same as july. elsewhere, it's about trade once more. donald trump threatening to escalate the trade war with china. with got dollar effectively holding on to gains. treasuries ticking a bit lower. this is down to the report on goody, a bit more to the
to the bad. on top of that, we did see a revision to the biggest month. -- previous month. 4%, data should be out any second now. a little change on this part of the world for the time being. , slightlyre at 4.1% higher ppi. cpi slightly more aggressive than addicted by the economists. that's 2.3%. 2.1% year on your price increases. let's find out what is happening with david english. as weak -- david ingles. david: a little bit lower on the hang seng index following the data. leslie higher, both on the consumer price and consumer price, 68384 on the change.
waiting for the escalation to really gain some traction on friday. nothing was announced. we had thethat, forex numbers coming out friday. a little bit lower, first time in a few months from china. trade numbers were interesting on the weekend. mainland tells you the cause and effect of what we're seeing between the u.s. and china. let's look under the hood here. mliv . session those are here. your leaders and gainers. 36 down 11 up. here's where we are here as far as moving averages. you look at the weekly chart, we did close below that. it takes you back to the level of about 26,000. points north of the
level right now. let me change this here. there with me and look at this chart. we closed below systems level. last week. let's have a look at that. volumes have been light, which is a good thing because markets haven't been doing well. shanghai, open lower, a little higher on the benchmark. basically flat. 355, unchanged still. 4.1%, eco-go on your bloomberg. 4.1% ppi, 2.3% was the actual number for your consumer price inflation gauge. to the chiefs get china economist. just looking at the broad numbers here without diving into them, what do you see? guest: definitely cpi inflation
coming out. largely led by food price. rishaad: pork. swine flu. season, china has a lot of -- ourher this can continue, outlook is that for the year as a whole, trying to figure how cpi inflation could remain around 2%. second half, still around 2%. one interesting thing from today's number is that ppi inflation has moderated, suggesting that going forward -- it's going to diminish. rishaad: it's also telling us they have pricing power, which tells you inventories are looking all right. on some of that, we're seeing an economy growing. they're all clipped. guest: yes.
i think in the second half, when he to watch china's fiscal policy. as we've been observing fiscal policy is accelerating at a very fast pace, led by the surging provincial bond insurance. as long as the bond insurance can continue, weaving the infrastructure investment in the second half will rebound to about 10% with provincial governments raising a lot of money from the markets. lgf three, the fourth risk we are also diminished. david: i was going to ask you something. the economy has been slowing down, even before the traits that came along. came along.t i'm just wondering, do i look for this to pick up as this continues to disappear?
i will this be enough to actually put a floor under growth? guest: on the shadow banking side, we probably have passed the worst part of picture. mentioned they do have andasurative approach measuring financial delivering. is china'ss missing provincial government bonds will start to pick up. if you add those provincial bonds back to psf for financing, we think china's credit in paul's will be started -- in paul's will be started -- impulse will be started. it already picked up a bit in july, suggesting overall the monetary policy conditioning is easing. david: does that worse than the debt position? one of the narratives taking
form is because there's a slowdown, china might put forward -- guest: good question. i think here, when we are talking about fiscal policy to become more proactive -- fiscal thecy is implementing budget policy for the year. so sequentially, we will see larger fiscal policy impulse on year on your terms. fiscaltill has small contractions, as mentioned at the beginning of the year. china's fiscal deficit will decline by .3 percentage points from previously last year, 2.9% to 2.6%. rishaad: how much difference does that make, ultimately? guest: well, i think the government still once to maintain the overall message -- wants to maintain the overall message in the financial sector,
china needs to engage in deleverage. but given the trade war in the second half, they need to implement this policy with a measured pace. otherwise, the unemployment condition will worsen further. rishaad: but it's a negative multiplier effect. this is the problem. you can do the basic studies and say this is how much it will cost, and aspect. and i think david, you've got what? 3/10 of 1%? i think twitter has a more aggressive call on this. billion, think $250 worst being imposed, 25% tariffs, will take up china's growth in the next few years by 100 basis points. four percentage points basically. if you spread this into three years, for example, per year it's very similar to your
number. i think it's still manageable. the sky won't fall. i think are hatched the government is very much worried -- i think the government is very much worried about employment side. 1.4 million jobs will be affected. david: where do these jobs go? are we underestimating flexibility of the labor market? those jobs form somewhere else? guest: i think at this moment, as long as china service sector continues to grow around the 7-8%, the service sector should be able to absorb a lot of jobs. the other thing is, this movement of china's labor market remains fairly tight. for one job, there's about 1.2 jobs waiting for the person. and more importantly, if you look at china's working age population, it has been declining since 2014.
every year, the working age population will decline by 1.4 million people. as long as the government can maintain its determination to push through china's economic reform, i think this trade war will not create a a big headache on the chinese economy, and china can use a growth strategy to grow out the tariff war with the united states. david: if i'm president xi, then, obviously i'm not. rishaad: really? david: what should i be worried about then, when i look at donald trump? guest: i think perhaps the big worry, china does not know where the bottom line lies from the trump administration, whether president trump would like to see trade balances with china, or he would like to open china's market further.
latter, the chinese china has shown, by the past experience they are willing to negotiate. a lot of those measures are consistent with china's own reform agenda going forward. rishaad: always a pleasure. thank you so much. going to move into the first word news, courtesy of kathleen hays. francee: --kathleen: says it's confident it won't breach rules and there is no threat of french spending plans overstepping the market. he said regressing public accounts and france was not negotiable, but declined to say what measures need to be taken. the mayor says italy would stay within eu guidelines. >> we will judge on that. and i've had a lot of discussions with --
think the importance of the decisions that will be taken with the next at sign budget. that all ofident were --ian leaders kathleen: iraq is pumping oil at record levels despite unrest. crude is about 4.4 million barrels a day, as agreed under the opec output restrictions. and protests are not causing any disruptions. demonstrators burned government buildings and the iranian consulate, demanding jobs and basic services. south korea has become the first of iran's top three oil customers to fill american demands to stop buying crude from tehran. it imported no
last month -- toronto must month. -- tehran last month. korea is the first to cut off all deliveries. cryptocurrencies continue to tread water, trading far below the dazzling highs they enjoyed earlier this year. bitcoin is now worth around $6,000, a long way from $20,000 back in january. smaller rival ethereum sell over the weekend to 100 $90 and is down 74% this year. the cofounder says there is little chance of repeat of the explosive growth crypto has enjoyed. >> getting to the point where there's a ceiling insight. right? as he talks to the average educated person, they probably have heard of watching these slumps. the reason for opportunities with extra growth in anything in this space anymore. kathleen: global news, 24 hours a day on air and at tic-toc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries.
downside with the m w, -- bmw. maybe 7% of decline. catering management also down. let's find out what else is going on. david: absolutely, lots of things to talk about. what's get started with coca-cola. the company is reportedly with its interest in a company. britain's sunday telegraph says coke is preparing a bid, it previously reported the deal could be worth about $3.9 billion. coke paid more than $5 billion for a coffee chain as it looks to diversify away from soft drinks. after this investment down low to topple the capital after plans fell short of its demands. the first point is nominating 12 directors, including george
strawbridge, who has been working with hedge funds. shares trading 20% below level two decades ago proof mismanagement, waste, and ill-conceived strategy. cbs dropped a les moonves after sexual harassment. six more women accused him of inappropriate behavior or assault, with claims going back decades. that brings the number of women to 12. as named joseph amiello president and acting ceo. we look at this one set to expand its markets in the midterm, including into hong kong and southeast asia. the company remains focused on its core mainland chinese customers. >> our international business extension will solve what
additional offerings i can offer. number one will be overseas medical access, medical tourism. we have invested in the idea of group earlier this year. we also, with a consortium, acquired group in australia. the way we see it, we want to provide some of the more, some of the service that requires service expertise, that might not be as good in china. i think second, over the course of probably in the midterms, we start to think about, can we move into other regions to relocate some of -- replicate some of our technologies? i think asia would be the most natural place. hong kong, bay area, or southeast asia will be something we will look into. southeast asia, we'll likely look to work with a partner,
someone who's off-line and meet with a technology partner. then we could do a digital off-line services offering. >> the question being asked is, when will we dock the ipo? >> good question. i keep asking myself that, too. a -- there will be is definitely a plan for it, a target for it. but it is not the exact timing we are looking into. we have not said yet. for us, ipo is just a milestone. it's not about how the market is now or trying to time the market. ready,po when we're because that will help us go into other international markets. jeff chen speaking to haslinda amin. have a look at what is going on market wise after the hang seng.
let's look at how much trading we have had. 20 minutes of trading and we are down just about 1%. what is going on? david: let's have a look at what else is happening. some of the top stories trending across different platforms. we get started with what's on the terminal. reading president trump supporters are coming out in force to defend him. let's have a look at what is happening on tictoc. there we go, on twitter. this is what people are looking at. some of silicon valley's superrich, just in case you share their pessimism, how they are preparing for an apocalypse. let's have a look at bloomberg.com. , big elections inconclusive -- big elections, inconclusive at that, gridlock. check it out. those are the stories trending across the bloomberg universe,
david: you're watching bloomberg markets, china open. i'm david ingles. rishaad: said to her 15th marks 10 years since lehman brothers filed for bankruptcy. we look back right here on bloomberg on how life changed after the collapse. >> they really saw at the last minute -- thought at the last minute, the u.s. government would jump in. i got a phone call from our u.s. had telling me it's over. that was really the worst-case outcome. we hadn't expected that. >> right through 2008, it was
clear confidence in the banking system was waxing and waning, and only a serious recapitalization of the banking system, both in the united kingdom and the united states, would resolve the problem. >> when i realized how much debt -- $70the market, 70 trillion, 90 million -- 90 chile dollars. >> that's when i realized things were much more interconnected than i thought they were and what seemed to be small markets can have much bigger affects than you thought. >> i remember saying to a good friend of mine, i'm down on paper, 100 million quit today. >> you never really know because human beings tend to say this time is different, and history says that's not the case. >> as you look at the banking system, there's more capital today. but there are lessons we must press forward on.
we must think about what vulnerabilities are in the economy today. david: yeah, 10 years. rishaad: since her 15th. -- september 15. david: on saturday. rishaad: i picture these guys coming out with boxes and putting them into taxis. it was a day, people didn't get a sense of what is happening, the systemic problems it caused. relating to qb, capitalization of the -- relating to qe, capitalization of all the banks. 2008, said to her 15th, -- september 15, 2008, it was a saturday this time around. a lot of people think rates were at zero. it was only recently yields started picking up and they went away from e.m.'s. 10 years to the day on saturday.
let's have a look at markets right now, trading across the weekend. jakarta coming online in about a few minutes or so. this is the damage, hong kong and manila. rishaad: second-biggest bank in southeast asia, four indonesian stocks reaching the lowest level since 1998 and the financial crisis there. anxiety has clearly returned. david: .3% at the open in indonesia. i would mention the philippines a little bit more. look at my terminal. ranking, it ranks the individual indices. last week was bad for indonesia and hong kong, which was in the top 10 of the worst-performing indices in the last five days. you can ignore venezuela and argentina. philippines, bottom of the barrel, down 4.4%. yeah, just a lot of things comes
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david: it is 10:00 a.m. in hong kong. i'm david english. rishaad: i'm rishaad salamat. this is "bloomberg markets: china open." david: we are talking trade here. china's trade surplus hit a new high amid threats on exports -- of tariffs on all exports to the u.s. president trump said he is ready to go. rishaad: alibaba, currently hong kong and china dragging down
aipac markets. alibaba saying jack ma will step down as chairman in a year, returning to his first love, which is teaching. david: alibaba says jack ma will be stepping down as chairman a year from today, returning to his first love, education and philanthropy. rishaad: let's look at shenzhen. a new survey of the best places for jobs and wages in china. it's all about trade. .rade tensions not going anywhere at the moment a look at the latest coming -- trade tensions not going anywhere at the moment. i look -- a look at the latest coming out of the white house. david: if you go by china data, they don't export more than $500 billion, but that gives you an indication of the magnitude, how bad this could get. rishaad: before we get to a look at what's going on in the china
market, the composite in 0.7%.ai down about shanghai and shenzhen. coming again in hong kong, 1.25%. no real reaction at the moment to these inflation data. china was up at a faster rate than had been anticipated in august. the swine flu, possibly -- partly responsible there. david: inflation coming down. week by week, we are getting more provinces. see more cases across the country. inflation picking up a little bit. producer prices also picking up. let's bring in stephen engle. what do we have? rishaad: swine flu? stephen: there is a gulf between us. four provinces and counting. we kind of knew this. this was baked into the cpi numbers already. flooding in shandong province and elsewhere in china has
driven up that shall prices. prices.n up vegetable food price inflation makes up 30% of cpi. you can see why, when pork prices go up and when vegetable --ces, go up cpi goes up when vegetable prices go up, cpi goes up. it is still below the government possible your target of 3% -- government's full year target of 3%. there is less pricing power for manufacturers. rishaad: there is pricing power. 1/2 years of falling prices. they do have pricing power, but you are seeing the paradigm shift a little bit, where there is increased cost for manufacturers and less pricing power coming out of the gate, at a time when there is great uncertainty in the chinese economy with this trade war that seems to be escalating as well. rishaad: speaking of which, we
had that record trade surplus for china with the united states. david: but that's not the real story. rishaad: you tell me the real story. stephen: there was a record trade surplus. that is the headline. rishaad: what we know as frontloading. stephen: we had these pledges and promises and threats by the trump administration to impose between 10% and 25% tariffs on $2 billion in additional chinese products. it did not come to pass yet, but trump, of course, went all in and said $267 billion. there was frontloading by traders. let's get the ships going across the pacific earlier than -- get them into port before those tariffs take effect. trade, overall, exports up 9.8%, but that was the slowest pace since march. rishaad: you buried the lede.
[laughter] david: from 36 to 15. we're not there. stephen engle with the latest on china. we will have a look at the markets. jakarta just coming online. taiwan as well. klci. the philippines, not very pretty, 1.8%. the inflation rate came out a few days back. almost cementing, perhaps a rate hike is coming soon. rishaad: yep. yuan,have a look at the the stability will not be easily held if donald trump seizes china assets. mark has been writing on our blog. he is in singapore for us. tell me about this. >> this could be even more disturbing than the idea that donald trump puts tariffs on
practically every kind of china import that is available. the idea that he could use some executive power to actually seize assets of chinese companies that are in the united states -- this would be -- cybersecurity would be the headline under which he does this, and if he sees it as a significant threat, he could go ahead and use something which was in place under the obama administration, and he could actually seize assets of chinese companies. this could take the trade war into a completely dangerous new territory, because china has shown it is ready to retaliate on other tariff issues. if america does this kind of thing, you could imagine the china may be considering to do something itself. this is something which the market probably haven't focused on too much so far. it's probably even more dangerous than the idea of just tariffs. david: it does bring to mind something a lot of our guests bring up on the show, when you look at this issue between china and the u.s.
i'm not calling it trade. it is bigger than that. this takes us to a much deeper level of concept. mark: exactly. this is very unpredictable territory. when a country actually seizes financial assets of another country, and this goes to the very highest level, it's a very bold, dangerous move. the chinese government -- in a way, this is economic war. it is something which would be very dangerous for the united states to pursue. donald trump is an unpredictable character. we don't know if he is really taking this very seriously or not, but i'm sure there are people in washington who are trying to dissuade him from doing something as stark as this, because it will no doubt drive a wedge between the united states and other countries as the, because they may fear, european union or japan, may fear they are next in line to have their assets seized. you just don't know in which direction this will go, and investors will get very nervous, because this infiltrates into the heart of free movement of
capital, can i get my money back when i have invested it somewhere. if there is any threat to people getting a return of their capital, traders will flee for the exits. it could be very destabilizing across global markets, let alone chinese markets. rishaad: tell me, also, mark, the international energy agency, iea, seeing a tightening in oil markets. surely somebody is right? mark: this has something for everybody. obviously, the united states has put a lot of pressure on people not to take any more oil from a run. iran is one of the -- from iran. iran is one of the big producers. south korea has reduced imports to zero. china and india are also reducing imports, not yet that far, but they are reducing them. the disappearance of irani and oil is squeezing markets -- of iranian oil is squeezing markets.
there is demand for oil based on economic growth, but if these tariff war's continue and get worse, surely global economic growth is not going to be that good. it will be on a downturn which some people are saying for the next year global growth will be much weaker than it was for this year. you have some kind of split here between what some people in the energy market are seeing and what some people in the wider global economy are seeing. if the people are right for the wider global economy that it doesn't do as well next year, then surely that means that oil prices don't have that much upside from here, despite the fact that iran is not able to produce as much oil. rishaad: mark, good stuff. thank you very much, indeed. you can catch up with more of what he has in his musings on our blog. mliv , get the market run down, get commentary. find out what is affecting your investments right now. over now to get
paul allen in sydney for us with an update on your first word news. paul: thanks. former u.k. foreign secretary boris johnson has launched what , callingas a new bid prime minister may's brexit strategy at humiliation. he rejected may's plan to keep the u.k. close to eu after separation next march. the proposal would leave written having to -- without having any say on making them. swedish prime minister stefan locks and -- the swedish prime minister says the general election has produced no clear winner and he will stay on as leader until parliament has a chance to decide. the social democrat coalition had fractionally less support than the alliance opposition. populist sweden democrats hold about 19%, making them the likely kingmaker after an election dominated by immigration.
north korea celebrated 70 years of existence with a toned down military parade observers say shows willingness to revive talks with the united states. they passed through pyeongchang without any sign of icbm's. this is -- president trump claimed credit for the change, calling it a very positive statement from north korea. cryptocurrencies continue to tread water, trading far below the dazzling highs they enjoyed earlier this year. bitcoin is now worth about $6,000, a long way from the near $20,000 in january. $190,um fell to below down 74% this year. there is little chance of a repeat of the explosion. >> the blockchain space is getting to the point where there is a ceiling insight. -- in sight. if you talk to the intelligent
person, they have heard of blockchain at least once. there is not an opportunity for yet another 1000x growth in the space anymore. paul: global news, 24 hours a day on air and @tictoc. i'm tall allen. this -- i'm paul allen. this is bloomberg. david: we will talk about how bad the tariffs could get. rishaad: looking at china's best-performing cities and the risks they face from a trade war. perry wong joining us next. this is bloomberg. ♪
such as gross regional product per capita and foreign direct investment. top one came up as the after being number four for a couple of years. it was referred to as a little sleeping village about 30 years ago. its success can largely be attributed to -- cities.er this is north of shenzhen in the guangdong province. four cities in the guangdong province made it into the top 10 among third tier cities. joining us from beijing is perry wong, a milk and institute -- milken institute m.d. for research. tell us about this. shenzhen in pole position, as it were. what is it doing right compared to the others?
perry: a very open economy, innovative. never failed to try on just about anything that worked. that's in the dna of the city. so, the performance in the last 30 years, better yet the last three to five years, really makes the city standout. say whatmany people happened in hong kong -- hong kong has lost its get up and go. did it get up and go and move to shenzhen? perry: [laughter] well, not quite yet. i think they are two different economies. so, not so fast yet. are a lots -- there of complementary characteristics. they can leverage each other pretty well. that's given time, not right away. rishaad: but it's a whole new isn'tong -- guangdong,
it, compared to others? perry: correct. if you look at the ranking this year, it is well represented. you have the most open economy, shenzhen, ranked number one. then you have the largest chinese city at number two. then you have the most integrated industrial complex in the north ranked number three. those are the top three large cities. then if you look at the smaller cities, i think what surprises many people will be the fourth four,st city ranks number as you indicated in the beginning. all those economies are close to hong kong and macau. one of them actually has a long reputation as a manufacturing center in the south, quite competitive to its large sister city. it is quite interesting. david: this is david.
talk to us a little bit more about guiyang. that city in that province doesn't automatically come to mind when you talk about the most prosperous parts of china. perry: correct. i think you are quite right. you are being very polite. guiyang is one of the poorest provinces in the country since ancient times, just simply because of the logistics and the geo position. however, the city has become a , communication, data storage, cloud computing, also a transportation hub for china to belt and road initiative. it is a transportation point to go south and southwest. perry, i'm quite
curious. you are there in beijing. i can't help but peer over your shoulder. i hope it is fog, but something tells me it is not. how does the formulation and methodology change when you measure the success of these cities? the growth model is changing. china trying to stem air pollution, i imagine, would have a big impact on how these cities prosper in the future. i'm guessing you wouldn't normally want to live in a city that is high-growth, but also highly polluted. change the, we don't barometers that often. i think the value of any ranking is that you have to have a very stable or consistent parameter in the model. when we went out to do this four years ago, we actually -- brated the model
the willingness of foreign capital, foreign nationals to live in the city. foreign direct investment is one. igh other one, i think we we quite heavily is the share of the high-value industry that would include engineers, high-end services, bankers, etc. , to be able to work in that location. i having those two, we implicitly state or described how important that part of the element is in our ranking. they are not direct, but over wouldcertainly no one like to live in a highly polluted environment. quite nicely, two days ago when i landed in beijing, the sky was but it changed a little bit today, unfortunately. ,opefully by the time i leave
rishaad: you are back with "bloomberg markets." i'm rishaad salamat. david: i'm david ingles. bit.asing a little when you look at the growth numbers, a little bit of a slow down. trade tensions and uncertainty. capex being shelved ahead of all of the uncertainty. perry wong is still with us, milken institute, m.d. of re
search. thanks for sticking around. you guys ran the numbers to come up with the top 10 list here. help us understand, based on your understanding, which of these cities might be impacted the most from these trade wars. actually, if you look at the top 10 list, more than half the cities i think would be impacted by the trade disruption, the increasing trade tensions, simply because many of those cities are quite open economies. they are all --- they all will, to some degree. some might fare bought her -- better because of certain products but i think, all will be impacted. rishaad: shenzhen with the whole chinadown on made in 2025 is in a position that could
be quite precarious, isn't it? perry: yes, it is. not only the current stage, but the intense discussion or negotiation, but also i think into the future as well. is it going to be all negative? i think it is way too early to tell, because foreign economies -- for an economy of that size, there are ways to mitigate some of those negative impacts. so, we will see, but it does impact investment in years to come, if indeed we cannot resolve this issue. david: perry, a big part of this conversation is which parts of the manufacturing capacity of china move outside to southeast asia, but you are also doing some research here on third tier cities. help us understand what the cost of doing business in those third tier, fourth tier cities is. perry: yeah. actually, we look at chinese
geography. as can try to think of china which china do you wish to talk about when you talk about expenses and such. you can stay with the tier one, tier two cities. they are expensive. if you go down to the third tier, fourth tier cities, they are quite cheap. that's why the chinese central government had tried to build up the infrastructures so they can migrate some of the manufacturing activity of the coastal region to the inland region. now, in our ranking this year, one city actually rose to the top 10. cheaper than many of the large cities in the province. the city's manufacturing base has grown in the last decade and shenzhenn contrast to
or shanghai. some of those actually have quite restrictive policy on industries because of pollution issues. now the growth of the province probably incdicates that there s vast land and city space that can do manufacturing. rishaad: always a pleasure. thank you for joining us from beijing. perry wong, m.d. of research at the milken institute. taking a look at those top cities, where to do business, which are the best places and the not so good places. david: right. let's get you caught up on the latest business flash headlines. to 960 to raise up million u.s. dollars. cmb international and goldman sachs are joint sponsors of the offering, according to the prospectus. resume: due to
operations after they were halted last week by the earthquake. operations restored. japanese -- ♪ >> the eeci opens new doors of opportunity to innovative investment. the eeci fosters an ecosystem that facilitates industrial research by providing advanced infrastructure and world-class talent. worldiland welcomes the to invest in the eeci and benefit from special privileges. >> with generous tax incentives
>> 10:29 in hong kong. i'm paul allen with the first word headlines. france says it is confident italy won't breach eu budget rules, and the finance minister says there are no french spending claims. saiding at a foreign, he readdressing public accounts was not negotiable, but declined to say what measures need to be taken. he also says italy will stay within eu guidelines. >> we judge on that. i have had a lot of discussions. i think he is aware of the importance of the decisions that
will be taken for the next incoming budget and confident that all the italian political leaders are aware of their responsibilities. iraq is pumping oil at record levels despite rising popular unrest in the south. it is producing crude at about 4.4 million barrels per day, amid protests in neighboring regions that are not causing disruptions. demonstrators burned government buildings and the iranian consulate, demanding jobs and basic services. south korea has become the first of iran's top three oil stopmers amid demands to buying oil. china and india have restricted their orders in the face of living sanctions on iran.
korea was the first to cut off all deliveries. alibaba says jack ma will step down as chairman year from today to focus on his first loves, philanthropy and education. he told bloomberg last week he is looking at a change of life. the announcement comes on his 54th birthday. he has been pulling back from alibaba for some time after giving up the ceo role. someday, i will go back to teach, back to education. this is something i have more confidence -- i think i can do better then be the alibaba ceo. >> global news, 24 hours a day and at @tictoc on twitter, powered by over 2700 journalists and analysts in more than 120 countries. i'm paul allen. this is bloomberg. ♪ we have a u.s. jobs report
and earnings growth increasing, triggering gains for the dollar and yields on the treasury market. the cleveland fed president says the solid august jobs report and growing momentum underlined her support for continued gradual hikes this year. >> investors spooked by the rollback of stimulus, and you had russia and turkey coming back to meetings as well. and the ecb is winding up of bond buying program. it,ing us to talk all about the chief economist. thanks for coming on the program. last week we heard from john williams of the new york fed and he said the fed should not worry about hiking the yield curve into an inversion. what do you think of that statement? >> i agree.
i think the yield curve is something they need to be watching and i think it is something they should be concerned about. i'm not suggesting it is easy to take account of the curve because the numbers suggest if anything there is a bit too much good news in the u.s. economy and the fed needs to keep hiking and on current trajectory that will invert the curve at some time late this year or in 2019. great,, the numbers look especially the wage growth , but they have to start bringing on monetary policy because it is still abnormal. but you have a fiscal stimulus program. how does that set? if you are a central bank governor you would be tearing your hair out. >> i think if you had any hair left you would be tearing it out , no doubt the fiscal stimulus is coming at the wrong time, it deteriorating, it is making
the fed's job more complicated and is potentially also adding to why the u.s. economy is so strong, the white house can put tariffs on china because they are the stronger party in china will ultimately full. i think it is having an impact in none of them are particularly welcome. >> where do we go with them? when do the effects of those wherear off, and where does that leave monetary policy? >> well, i think what it says, second half of next year into 2020, gdp growth will be materially weaker. global that will put the economy in quite a different light, not a bad light, but it will look more balanced that it does at the moment. >> one last, quick question. do you think there's a case for the fed to become more aggressive in tightening policy?
if i am sitting in emerging markets right now, that is not welcome news. >> look, i don't think more aggressive. it obviously cements september in the next couple hikes as well. >> right. e.m.'s, where do we go from here? the positioning seems extreme but with the data on friday it could be the way to go. >> look, euro is a bit different, but if we look at e.m. and the commodity currency, the cyclical basket, conditions still look pretty hostile. to see anycult meaningful positive growth. it is not that global growth is terrible, but it is not accelerating. traders under both cyclical and structural pressure. that said, wherever there are
domestic former abilities, they will be revealed rid large. >> richard, tell me what you mean when you say donald trump's weapon rising the american economy. guessing, like everybody else, in clearly sometimes he is guessing as well. the u.s. economy does look very robust. there does seem to be a strategy on the part of the u.s. to take china and other countries to task around trade with the expectation that the other side will fold before the u.s. because the u.s. economy is stronger, and while this fiscal stimulus is rushing through, which will take another few months, it does look like in that sense trump is using the economy as a bludgeon. >> the dollar being the main hammer, if you will.
>> well, the dollar is obviously -- occasionally the white house has talked about it but i don't think they are concerned so far. >> richard, your thoughts on the latest inflation, wholesale price inflation out of china. we are going to get a chart up showing the pullback. tend to leave other global metrics -- are we in for a service slowdown? the main driver has been currency prices, particularly junerices which dipped in with growth over 60% year-over-year, now down to 45% or something in that order. china's ppi was stronger than expected but it is
still down half a percent from where we were last month. >> how slowly will grow will go, based onth economic cycles and what you are seeing from the ground. i don't think there's any doubt the next meaningful move is the slow, a lot of that matters and our view would be that we should talk about it as an in cycle slowdown. we don't have a recession in our numbers and it will occur in the next two years which makes it difficult for the global economy. it is hard to identify genuinely robust parts of demand. and ofs contributing course china has its own domestic and trade challenges, and in europe it accounts for about 8% of global gdp growth
and india is dealing with the legacy of his issues in europe with structural problems and politics which is keeping a cap on things. that growth we saw around the early part of this year will be the peak for a couple of years. >> and richard, a lot of it is being held back because of the uncertainty over trade. when do you think that will show up? is that a 2019 story? >> look, we have had a bit of an investment recovery in a whole lot of countries, in korea, in the u.s., in australia, in but it has been weaker than most indicators and i think there are two reasons for that -- one of the issues you mentioned around politics, and general uncertainty, do i know what the world will look like in five years. the other issue has been the increasing shift toward
intangible investment, and i think the multipliers from those forms of investment are to be thoseangible, and none of things to my mind will change very quickly. >> richard, always a pleasure. if you like cryptocurrencies, the crypto wiped out is deepening. bitcoins biggest rival leading the declines. more on that on the way. this is bloomberg. ♪
trade tensions. that's coming up in a little while. we are talking crypto. group,can look at the the asset class, far below the staggering heights they enjoyed. the days of explosive growth for the virtual currency are now over. the pointetting to where there is a ceiling insight. if you talk to the average, at educated person, they will see it. there is not an opportunity in this space anymore. what do you think of his comment? has all the easy money been made? >> i think he has a good point.
for the first five or seven it got by on a lot of word-of-mouth, starting off small and exploding. pretty much everyone and their mom and dad knows what it is now or have at least heard of it, so there is a lost continent of people can buy into it. that is his point -- it is not going to be driving growth, it will be getting people more involved and building up a use case for cryptos. >> what was he doing in town? >> he was in town for a ministry summit in hong kong over the weekend. it was a big confab of developers, talking about the latest ideas, things they are working on, leading edge of software. at the end,ented talking about what he has been working on.
>> is that this sort of fuel that they need to get that next leg up? >> last week, we had a lot of back-and-forth about whether goldman would bring a trading desk and we are still not clear. they said they never had a timeline but that is the ongoing conversation we have had a year. said innted on that and a way he would be happier if there wasn't any institutional trading for five years. his argument is if all they have made is something millionaires trade then what have we accomplished? i think that goes to his point, he is a real believer in cryptocurrency as the future of money, as a thing we can use that has practical, economic uses, as opposed to something like a beanie baby. >> what are people making of this, spending, trading, tracking? >> is interesting, it comes as
is same time that citigroup talking about bringing in digital asset receives, which is similar actually to the info the just got to send it. i think the industry is still digesting that. we are seeing prices come off a little bit today, but we are still figuring out where it's dance -- where it stands. >> great stuff. and with that we will move to the business flash headlines. -- it haskline previously reported the bid could be on the deal. the british-based coffee chain looks to diversify away from soft drinks.
and activist investor is planning to cut the entire board after they fell short of demand. nominating one man who has been working at a hedge fund. below twoing 20% decades ago and says it proves mismanagement. cbs announced the departure of les moonves after allegations of sexual harassment. six more women have come forward to accuse him of inappropriate , some ofor assault them going back decades. that brings the number of women who accused him to 12. >> right. let's have a look at the internet of things, intel
weighing in on the issue, saying it has to go beyond the citywide development to improve people's well-being. ask him about how companies in planners can work together to make cities not just smart but also intelligent. step,starts with a first which is getting access to the data cities already have, and then overtime bringing those data sets together from various asset in the urban environment and using that to deliver a next lever of insight and have the physical environment perform. again, applying machine learning capabilities to the data so that you have a self learning environment that can evolve and grow as the dynamics change. >> at this stage of development, what are the controls? >> for me, personally, it is how
do we reverse some of the impacts of climate change. looking at air and water quality, monitoring those things, helping cities become safer by providing better crime reduction capabilities. third i would say is improving the productivity of citizens through better mobility and transportation, the ability to access city services. you have heard trumps backlash, how are you navigating that? >> what you are hearing is perhaps not anti-tech, but perhaps antitank platforms in the form of social media, some of the lack of regulation around information. engage with faith and local governments in things
that deploy solutions and our ecosystem and partners continue to thrive. >> if you were to look into a crystal ball, 10 years down the road, how would it change, given all the technology that has been developed? >> there's an interesting quote that the former ceo of google said, the internet will disappear. i think what he meant by that statement is that the internet is currently something we lean into, we access it via our phone or pc. but what it is enabling is a set of invisible services that will operate as a set of data services in the background. core vices intel president. for breaking news, just in case you are on social media,
♪ >> time now for the battle of the chart. we have the best charts being pitted against one another. off, here isings adam. my chart today is looking at the big short in the treasuries market. it created headlines a couple weeks ago when we were looking ,t these speculative positions and then we had a week of getting the data every friday and we had a week where they were pulling back, and the latest data we got friday afternoon showed that people are getting back on that short u.s. treasuries that.
all of this data is prior to the increase in wages we saw in the most recent u.s. jobs report. it harkens back to the idea that we have god extreme positioning now in the u.s. bond market and there will be a lot of people who will be getting squeezed if things turn out better. i think that is what we had in the moveon's ride a and certainly one to keep an eye on. >> it is pretty interesting. and we have another asset class. >> yeah. i going to talk about the big divergence in china's local bond markets. the turquoise line shows the aaa rated bond yields in china, while the white line is the aa- bonds, which are considered junk in china.
top-rated seeare their yields decline and the weak ones have yields going up. showing,ings that are one is that the weaker ones are not benefiting from the stimulus measures. china might be pricing credit risks more efficiently. look at this period versus the previous, we have rarely seen this divergence. those credit cards are usually moving in tandem. just one more point i am making, one bond fund manager says investors should be slashing risk. >> there we go.
very nice. and if you are sick and tired of the treasury market, that is a good chart to have a look at, forward-looking indicator. >> i thought it was too close to call, but nevermind. [laughter] if bloomberg users want interact with the charts, go to gtd go. save those charts for future reference. let's quickly get a market rundown. >> equity markets not doing too well, down an eighth straight day in the asia-pacific. more coming up next. this is bloomberg. ♪
♪ >> 11:00 a.m. in hong kong. in singapore, it is 11:00 sunday night on the eastern seaboard. i'm rishaad salamat. >> i'm david ingles. we are entering the last hour of the morning session in hong kong will stop you are watching "bloomberg markets: asia." ♪ >> hong kong flirting with a bear market, dragging the regional stocks down, matching its longest losing streak in three years. >> and beer is back in indonesia.
it slumped yet again after asia's second-largest fall last week with the currency at its weakest level since 1992. tariffs are being put on all exports and president trump says he is "ready to go." >> and jack ma will be stepping down as the chairman of alibaba a year from today, returning to his first love of education and philanthropy. rishaad was pointing out that we are nearing a bear market. 30 minutes left on the regional china, the bear market is about 180 points away, so that would be roughly .7% from the current level. higher, ais slightly
moderation from the previous months. >> let's have a look at elsewhere. jakarta coming down just about an hour ago, down .5%. kuala lumpur just about flat, futures indicate a slight decline at the start of the session in mumbai. there you have it, that's a look at the down arrow's. let's have a look at what's going on towards sydney paul allen in the first word news. >> all right, thanks. swedish prime minister stephan lost me says the general election has produced a clear winner, and that he will stay on until parliament has time to decide. coalition democrat has fractionally less than the opposition. sweden democrats polled about 19%, making them the likely kingmaker after an election
dominated by immigration. north korea celebrated 70 years of existence without military parade -- with a military parade. the parade passed through pyongyang without any sign of intercontinental ballistic missiles. president trump claimed credit for the change, calling it a very positive statement from north korea. france says it is confident italy's populist government will thech eu budget rules, and finance minister insists there is no french o spending plan. he said addressing public accounts is not negotiable, but declined to say what measures need to be taken. he says italy should stay within eu guidelines. >> we will judge on that. discussions lot of and i think he is aware of the
importance of the decisions that will be taken through the next confident that italian leaders are aware of their responsibility. >> cbs has confirmed the departure of ceo les moonves after fresh allegations of sexual harassed and. "the new yorker" says six more women have come forward to accuse him of inappropriate behavior, with claims going back decades. that brings the number of women who accuse him to 12. cbs has also named a new president and acting ceo. global news, 24 hours a day and at @tictoc on twitter, powered by over 2700 journalists and analysts in more than 120 countries. i'm paul allen. this is bloomberg. ♪ >> thank you, as this trade war looks to escalate further we got inflation numbers out of china,
picking up on consumer prices faster than expected, driving up the price of pork. >> stephen engle has been crunching the numbers, our chief asia correspondent. what do we know here? >> inflation is picking up faster than expected. if you strip out the last two years of the lunar new year holiday, they are awesome a spike upward. this is the fast pace of growth since november, 2016. as david said, if you increase the price of pork, pork makes up a herd of price inflation which makes up a third of cpi. when food goes up, cpi goes up. exacerbating that fact, the cpi was blotting were vegetable prices are higher. cpi inflation is higher, ppi
4.1%ated a bit, we got with a survey of 4%. factory price inflation coming off a little bit but still pretty strong. >> there's also trade, isn't there? >> we were waiting on friday, it didn't happen. and we are already talking about the next one. >> you can say there's a bit of a truce, mexico came on board , with fullnafta round-the-clock negotiations. china, no. no progress on any of the talks, there are no scheduled talks, and that is the big problem. meet as willing to
early as the u.n. general assembly but nothing else. the days of being ripped off by other nations is over, he said, and he's ready to tax all chinese imports, not only with excess goods but another 267, which would constitute all the exports in china to the united states. he says he is ready to do that at short notice. surplus thatrade china reported over the weekend, and that will not play well. >> people were getting their stuff through. a bit of an aberration, but the headline number says a record trade surplus. >> trick-or-treat. >> our next guest says the u.s. stands to lose less in the
short-term, and everyone is a loser in the longer term. he joins us now from singapore. give us the thinking. well, certainly the current trade war that we are enjoying has been instigated by the u.s., who sees a lot of imbalances that have been there for a long time, in this is a way of bringing trade partners to the table in a heavy-handed way to renegotiate those agreements. strategy,that is the to adjust the existing trade framework. everyone else was caught off guard, and that is why they would lose more, but if we end up with a scenario where we have terrorists on everything for a sustained period of time then it
is global growth that will suffer and no one benefits from that. do you think we should move to that base case? 200, a further 250, and what would be the earnings? >> from an equity market point of view, we are getting close to pricing in the initial 200, and the market is already well aware of the next 267. but we are certainly not pricing in that full amount yet. earnings in china have been pretty good up until now. of course we started to see some downward revisions in large sectors, maybe not specifically related to trade -- we have seen some revisions but certainly sentiment is taking a big hit
from what's going on. >> tell me something -- how bad can it get? it's not just about the u.s. and china. this is asia in large parts as well, in this part of the world. >> absolutely. that is why we would suggest that in the long term, if we go down this trade war pass and stay in that situation, it is bad for the region in general, not just china, for sure. do you advocate any exposure at all to equity markets? just in case you are not invested yet. >> good question. we have been underweight equities this year, we have had a bias in the u.s. for growth which means we are still in some
of those tech names. we have also been overweight as thewhich we have seen potential next target in the trade war. we think that earnings in japan have been underappreciated by the market and we think it looks like a coiled spring. japan, you know nothing happens for a long period of time and then we get sharp moves frequently when everything catches up to the underlying earnings picture. asia, excluding japan, is a tougher story. we are starting to price in a worst-case scenario, and valuations are starting to look not so bad. if you can bear with a low valuation without a specific timeline, then we think it is time to start looking around asia. >> it was at this time last year
the topics was up 17, 18 straight days. us.are sticking around with still ahead, shaking it up. the chairman discusses streamlining corporate structure in the future of jaguar brand. >> and we will talk about emerging markets as we brace for another roller coaster week with tariffs and tensions between the united states and china set to intensify. this is bloomberg. ♪
could fetch about $1 billion usd. we will get a little bit more on what this company does, it is privately held. >> all the information we have on the company, $750 million usd. that would take it valuation wise up. bring karen back into the conversation out of singapore. about, things to talk there is turkey, the russian central bank. i'm wondering, is there a case at all for em's right now, especially with the jobs report we got on friday? i think certainly the jobs report on friday, as well as the
wage growth numbers, there is little chance we don't see a move from the fed on the 26th of september. we think the past days. >> we talked a little bit about why you think japan may have in an underappreciated market. elaborate a little more on the thinking here. earnings in japan are at an all-time high, despite the perception that the yen is relatively strong it is about 110. earnings in japan bottomed almost six years ago and have been up over that period of time, and the market is up less than 20%. believe aif you long-term driver of markets is always earnings then there's quite a big discrepancy. we think we should see that narrow. >> so it is undervalued, is what
you are suggesting. how does this change? there is political uncertainty, albeit fairly slight. that is probably how shinzo abe can win the leadership. that would be the thing which would constrain him with the more unpopular policies he might have on the table. there is also very little chance that he does not win leadership again. tohink you are referring what he sees as part of his legacy, which is changing the constitution. as long as he doesn't win by too much, that might not be a possibility and could be off the table. but certainly heading into the next couple years we have the abdication of the emperor, which is a big opportunity to start talking about changing the constitution.
i think certainly that will be an issue over the next 12 months. india is a bond market that has largely diverged. is it too late to get in and should they even bother? yes, so as you said, there is very little linkage between turkey, argentina, and asia, but in terms of foreign funded current account deficits, india and asia stand out. those currencies are down about 10% plus so far this year. as you mentioned, the market looks great from a local currency point of view but as a foreign investor there has been no gain. we'd like to see a resolution and a bottom to the currency situation before we want to increase exposure at this time. >> the thing is, is their
conviction? what are your conviction calls? japan, and weke think it looks like a coiled spring compared to earnings, which we think are not reflected in the market. one call that we still like, japan. we are still long growth in the u.s., which takes us to be cyclical and tech areas in the u.s. where we would say that is a conviction call. >> all right. thank you very much. coming up -- announces the ceo is stepping down a year from today. we will see who will step up. this is bloomberg. ♪
♪ >> you are watching "bluebird markets." i'm david ingles. >> i'm rishaad salamat. taiyo yuden will resume production after being faulted by last week's earthquake, cutting power across the island which affected vehicle making across japan. power has been restored to almost all the island. >> some of america's biggest companies say the trade war will not dissuade them from boosting america. says itident tweeted can be made at home but ford has already said it has no plans to do that.
he is also calling apple to build product in the u.s.. by chinese health chain is seeking to raise up to $963 million usd, revealing a price range between $14.80 to $17.80 hong kong. it is known for its customer service which includes free manicures and shoulder massages. >> i was there a couple weeks ago. let's have a look at china's richest man, stepping down as chairman of alibaba one year from today, he told bloomberg last week that he was already looking for a replacement. >> i think sunday and very soon
i will go back to education. have -- imething i think i can do much better than be alibaba ceo. >> our asian tech reporter is it might have been flagged up a little bit. .here was a years lead time this is a good time to bet himself in. what is it like to be without the founder? transition,radual ever since 2013 when he stepped down as ceo and now you have a year where he is transitioning to chairman and passing on the torch to the current ceo. alibaba has placed this partnership structure where 36 partners will lead the entire
company and they also get to nominate the majority of the board. it won't be just daniel who is taking over the company. that said, this position he is in, only one person at alibaba has held both the title of chairman and also ceo. >> tell us a little bit more about daniel. >> daniel will be facing immense responsibilities starting next year. he is already taking over the day-to-day responsibilities at alibaba, this whole initiative about how alibaba is venturing into a trillion dollar market, that is his initiative. he has been championing it since three years ago, investing a tremendous amount of money into grocery stores and retail stores, andartment he is really championing the most expensive initiatives. >> it seems he has been moving
in that direction for a while. >> jack ma has always said he wants to be a teacher and is currently teaching. apart from that he says he wants to use technology to transform environment initiatives in china, making the sky clearer, waters cleaner, that is something he has said since 2013. >> can we expect the overall strategy to change? >> at this point, we don't think there will be a drastic change, all the chess pieces are in place already, alibaba at home is trying to venture into new retail and abroad they are focusing on southeast asia. they have tieups in local commerce in payments and also and thatw acquisition will be taking a lot of initiative to expand in southeast asia. >> thank you so much.
heading into the lunch break, have a look at how we are faring. points, 160e points, my mistake. we will be entering a bear market, 26,675. china slightly weaker. it is a fairly significant move compared to what we saw out of china. consumer prices are on the way up. shanghai and shenzhen closing out along the lunch break which is coming to an end in tokyo, the market is moving slightly to the upside in the morning session. we have a lovely view of the interior palace. unchanged, we have the
♪ >> 11:29 in hong kong, i'm paul allen with the first word headlines. china's consumer inflation grows for a third month in august while producer prices ease. a consumer price index jumped from a year earlier while the producer price index climbed 4.1%. in a key vegetable producing region and soaring rents all have economists concerned about inflation risks as the economy slows. with therade surplus u.s. rose to a new high even as overall growth slowed and the president threatened to slap tariffs on all exports to the united states. despite economists saying that
you immediate impact will be governor is warning about the long-term effect on confidence. he says micro sentiment can easily change. >> the people may become nervous because nobody really knows why suddenly there is a trade war. they may change their demand in terms of stock market investment. >> iraq is pumping oil at record levels, despite raising popular unrest in the south. it is producing crude at 4.4 million barrels per day as agreed under the output restrictions and protests in the oil-rich region are not causing disruptions. demonstrators burned government buildings and the iranian consulate, demanding jobs and basic services. cryptocurrencies continue to tread water, trading far below
the dazzling highs they enjoyed earlier this year. bitcoin is now worth about $6,000, a long way from the $20,000 back in january. weekend fell over the to below $190. the cofounder says there is little chance of a repeat in the explosion of growth crypto's have enjoyed. >> this space is getting to the point where there is a ceiling insight. if you talk to the average person, they will have heard of it. there is not another opportunity for an explosion in the space. >> global news, 24 hours a day and at @tictoc on twitter, powered by over 2700 journalists and analysts in more than 120 countries. >> thank you. coming out of the lunch break in tokyo a little higher compared to when we went in.
upside, youo the look at majors and nothing is really happening. if you flip the board we have australia up, falling into effect on the back of the jump on friday. this is one of the bigger moves we are seeing in the sovereign bond market. >> we have the eastern economic forum beginning monday in vladivostok, with shinzo abe meeting with vladimir putin and xi jingping. what can we really expect from these meetings? well, the expectations are being kept fairly low for actual agreements or serious
progress. but the fact that they are talking and are talking about further talks is seen as a good sign. aboutre going to talk possible joint economic activity they can do on disputed islands and other trade matters and along the korean peninsula. then the russian president will meet with the chinese president then they will have meetings with the south korean prime minister and mongolian president. there will be a lot of meetings taking place this week. >> jody, is kim jong-un going to be attending vladivostok? pyongyang is the nearby major city. we don't think he's going to be making the trip. notas invited and we had gotten word that he would be attending, so at this point it obviously there
will be issues involving north korea discussed even if he is not there. there is also news now that the prime minister says they should meet and there has been some discussion about whether they would but the prime minister says he thinks that would be a good idea. about a possible summit between leaders in istanbul? what do we know about this? >> this is more talking about talking. there have been serious discussions that russia and france and germany and turkey would meet in istanbul and some progress has apparently been made. there will be serious diplomatic talks while others talk about
whether it could occur. that, france has invited president putin to come to france and apparently that is under serious consideration. a lot of talking about talking. >> all right. we will be around to cover all that talking, the agreements and disagreements. thank you. jodi schneider. china says it can escape the trade war with only minor damage. the u.s. president ratcheting up the pressure by saying he's ready to slap tariffs on all chinese imports on short notice. pleasure to have you on the program. this,having a think about we know donald trump has been threatening china, but has he actually specified what he is
waiting for? what exactly is he asking them to do? >> well, the first comment i would make is let's keep in mind that this dispute is not about tariffs on bicycles, digital cameras, refrigerators, or any of the other products that the united states employs the private tariffs. this is about chinese industrial products, specifically as it relates to technology and intellectual property. the united states is not the only country that is having these issues with china. the wto has been unable to cope with china's policies because of china's objectionable practices that are not covered. the first thing to be clear on is that although we are talking about tariffs this dispute is not about tariffs at its heart. >> do you need a sledgehammer to crack and not?
-- crack a nut? >> [laughter] the people who disagree with what you just put forward would say all other previous attempts to make progress on this issue have not succeeded. for those of us who support open trade, free trade, tariffs are never good news. there are a lot of concerns about what the u.s. is doing. on the other hand, attempts to deal with this issue before have not been for. -- been fruitful. >> so what will be different this time? is there a degree, in your view, of cultural dissonance coming out of the white house and administration? think there's any question whatsoever that there are some differences between beijing and washington, d.c. in terms of how they are perceiving things. i think the u.s. administration
is perhaps interpreting the economic headwinds that china has recently hit as an indication that the u.s. is somehow "winning" the trade war, and is perhaps emboldened to put its foot on the gas pedal as a result. on the chinese side of the equation, reports seem to indicate that the chinese have calculated that as a cost to u.s. companies and consumers continues to increase, it will start to create political pressure on the u.s. administration, particularly with the midterm elections coming up. i'm not convinced either one of those regulations are correct, however. >> right. so if it's not trade, and if they do back off over the next two months, what will we watch out for? and equally, what do the chinese have to consider in terms of delivering good news to president trump? i say keep your eye on two
specific windows of opportunity. the u.n. general assembly is going to convene in new york later this month, that could be an opportunity for a sit down with president xi. then there will be the g20 summit in argentina in november. that could also provide an opportunity for the leaders to sit down and initiate the process of a longer negotiation aimed at resolving the crux of the issue. >> ultimately, many people say they can be resolved at the wto, but is it fit for purpose? a lot ofunfortunately, these problematic practices on the part of china either fall under areas that are not covered by the wto -- keep in mind, the wto came into effect in 1995, and we haven't had a successful, full round of multilateral negotiations conducted since these- or in other cases,
practices fall into the gray areas that are hard to enforce. that is one of the reasons why the u.s. has resulted to ratherral trade actions than pursuing remedies under the wto. deal, i wouldta imagine the kernel of excluding canadians are quite high. can you have nafta without canada? >> a fair question. the first thing to keep in mind is that we don't have an agreement, we have an agreement in principle that sketches out the broad strokes but many details remain to be finalized. mentioned, there are still negotiations ongoing with canada and there are some fairly difficult sticking points.
canada's supply management system is very problematic from the u.s. perspective with chapter 19 provisions of antidumping duty cases, very important to canada and yet that was dropped out by the u.s. and mexico and cultural industries. there are some tough negotiations yet to be done and then we have to translate into a formal agreement. in terms of your question about does this complicate congressional approval, the answer is emphatically yes. there are two issues. there is a debate about whether the trade promotion, the trump administration, could even accommodate nafta withoutaccommt canada. the other issue is that the strongest message we've gotten from the u.s. congress is keep can that in nafta. if canada drops out of nafta,
things could become problematic. if that wasn't complicated enough, the final thing to bear in mind is that it is unlikely that the current congress will be the one to vote on this nafta agreement, it will likely be the and things could become even more complex. if the democrats do rest there isf the house, the degree that this could be ratified. >> it is hard to gain that too much in advance because we have to see what the final agreement actually looks like. the one thing i would say without hesitation is that if they are attempting to move forward without canada that is certainly going to be a high hurdle to clear in the u.s. congress. >> great talking to you.
♪ >> you are watching "bloomberg markets." >> have a look at how the indian markets are doing. >> right at the open, have a look. you are at 64 at the start of the year, now pushing toward 72.50. one of if not the worst performing currencies. foreign investors will really think twice about participating
in one of the world's best performing equity markets. >> let's take a look at one indian company. santander has been synonymous with the indian economy for decades now. it is known widely, focusing on simplifying the corporate structure. >> we have a very strong history, we have a large amount because we arely i think weness --
are going to be in 10 different segments, so all the companies are operating through this. be reall consolidations, some will be under. >> and when you are through, does it look more like a holding company, of berkshire hathaway style company -- model the you can't savvy some other group. companies,ee big and then we have a way to go in financial analysis. then we have infrastructure.
there is a big difference. in aerospace we are trying to consolidate. then we have the tourism sector. >> your recent results show a pretty strong jump in profit -- what is driving that? i think all of our companies are focusing on profits and cash flows, and it continues to do well. apart from that our indian business is also -- businesses are doing very well. >> jaguar, land rover kind of a
dark spot in your results. what is going on? they are both strong companies over the last 10 years , they have done really well. but the industry is going through a few major -- i don't want to call it headwinds, major things going on. and for them because they are in the u k they don't know what will go on with brexit. so there are three or four things all happening at same , so they have to deal with and they will be
looking at products from withrent markets allocation between different platforms. but the focus is definitely on insuring that the company is strong. >> would that be on the potential list of things you might sell? no, not at all. i think we have a strong belief -- you want to make it stronger. was an exclusive conversation with amanda lang. have a look at these shares, splits between these four. if you are one of our clients you can catch up on all of these with tv .
♪ back.come . you are watching "bloomberg markets" i'm david ingles. >> i'm rishaad salamat. let's have a look at the business flash headlines. seeking a buyer for its container business, sources say hna is working on a potential bid on assets not related to the core aviation business. oft fell at the end
june, down from a record. >> coca-cola is reportedly moving forward with its interest in glaxosmithkline's malted milk company. they say they are preparing a first round bed and previously reported the deal could be worth $3.9 billion. last month coca-cola paid for a coffee chain as it looks to diversify away from soft drinks. >> japan has been spending exports rather than turning the first outbreak of swine fever after the outbreak on a farm. the agricultural industry says it is different from the african swine fever spreading in china, because there may be a link to recent outbreaks in south korea and russia. let's have a look at the key events around the world. slew of data coming in
at 8:30 a.m. london time. trade balance and industrial production figures are also out. >> big meetings coming up, president vladimir putin and japanese prime minister shinzo abe will have a sit down in vladivostok ahead of the eastern economic forum kicking off in the city tomorrow. >> and the fed president will be in albany, georgia, sharing his take on the economic outlook with that cities chamber of commerce. let's go to currency and take a look at whether this strong dollar story is playing out. the rupee continues to weaken, versus the dollar. close --antalizingly we are off it still. >> we talked a little bit about
these currencies. >> what has the peso been doing? it has hovered around. what is the deal? >> it was hitting 12 or 13 year and it has changed these recent weeks in the central bank has come out more aggressive signaling that it will be hiking rates in the next meeting. have a look at hong kong, china is already on its lunch break and we are nearing a bear market although it is worth mentioning -- . >> off the lows of the day. let's have a look at the constituents movers. what do we have currently? lowest.nternational the composite, they are
slightly more aggressive because of this swine flu affecting pork prices. producer prices are steady. part of of course a big the inflation basket. we play it day by day in some cases, we are getting more tastes of the swine flu on the chinese mainland. there's the function for our clients, and if you watch us regularly, g tv takes you to this, where you can scroll up and scroll down. and of course, a lot of these things come down, if you see something you like, say that, tweak it a little bit,. check it out
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